Search Afrox integrated annual report 2017

How we are structured to do business

The Linde Group (owns 50.47% of Afrox)

The Linde Group is a global company, focused on gases, engineering and technology solutions.

Afrox

Afrox operates in South Africa and in seven other African countries, permanently employing 2 092 people across sub-Saharan Africa. We operate and report according to four business segments.

Atmospheric Gases

Products and services: Atmospheric Gases are gaseous oxygen, nitrogen and argon supplied from various feed gas providers and our air separation units (ASUs). CO2 is obtained via a limited pool of local feed gas suppliers. Refinement of CO2 through a purification process is required to bring the grade of the product to an acceptable level of quality for use by customers.

Distribution channels: For Atmospheric Gases and CO2, we use bulk liquid tanker distribution or dispatch cylinders via road freight to merchant consumers. We also use our Gas & Gear outlets for direct sales to the end user. Linked pipelines are often used to service larger industrial customers.

Our Merchant and Packaged Gases (MPG) business manages our supply chain, warehousing and distribution needs for Hard Goods, sale of LPG and the regional sales infrastructure. LPG and filling plants are managed within the MPG structure.

Markets served: Industrial, medical, hospitality and specialty.

RevenueR2 283 million (2016: R2 319 million)

GPADE margin34% (2016: 37.4%)GPADE: R777 million(2016: R868 million)

Liquefied Petroleum Gas

Product and services: Packaged LPG, branded as ‘Handigas’, is supplied in smaller cylinders for lower volumes. Higher volume demand is met through larger cylinders or direct delivery to bulk end users.

Distribution channels: Our cylinder gas is obtained from local refineries or imported directly and transported by cylinder or in bulk. Distribution is managed by our logistics department.

Markets served: Our smaller LPG cylinders have many industrial and domestic applications, including heating and cooking, making them versatile and useful in all major sectors of the South African economy. Our larger bulk options are primarily used in manufacturing, larger commercial activities, retail and hospitality.

Products and services: Emerging Africa provides the full range of Afrox products and services to Emerging Africa, with the more significant products being LPG, CO2, Atmospheric Gases, Medical Gases and Hard Goods components.

Distribution channels: Afrox subsidiaries and Linde-owned, Afrox-managed businesses outside of South Africa report to a centralised management structure for Emerging Africa. Products are distributed via the most appropriate methods based on product and customer preference, be it cylinder or bulk.